TO: The Board of Regents Addendum XI-B-5

Business and Finance Committee

MEETING DATE: June 23, 2022

SUBJECT: FY 2022-23 Operating Budget

RECOMMENDED ACTION: Approve the University of Nebraska’s FY 2022-23 Operating Budget.

Reappropriate with the State of Nebraska’s Department of
Administrative Services any unexpended balances existing on June 30,
2022 that are committed to be spent in FY 2022-23.

PREVIOUS ACTION: February 12, 2021 – The Board of Regents approved amendments to the
Collective Bargaining Agreement between the Board of Regents and the
University of Nebraska at Kearney Education Association (UNKEA) for
the 2021-2023 biennium.

February 12, 2021 – The Board of Regents approved amendments to the

Collective Bargaining Agreement between the Board of Regents and the
University of Nebraska at Omaha American Association of University
Professors (UNO/AAUP) for the 2021-2023 biennium.

August 14, 2020 – The Board of Regents approved the FY 2021-22 and
FY 2022-23 University of Nebraska Biennial Operating Budget request
guidelines.

EXPLANATION: COVID-19 has created fiscal challenges, enrollment unpredictability and

other uncertainties for colleges and universities around the country. The
University of Nebraska’s proposed 2022-23 operating budget represents
the third year of a three-year plan created two years ago to address these
challenges but also position the university to emerge in a position of
strength for future growth and success.

The proposed budget prioritizes affordability and access for Nebraska

students, keeps spending flat on basic operations, and creates long-term
opportunities to invest in campus and system-wide priorities like student
success, faculty salaries, and facility maintenance.

Key elements of the budget plan include:

• A two-year, across-the-board tuition freeze in the 2021-2022 and

2022-23 academic years. The state’s 2.0% increase in state funding
was critical in supporting the University’s affordability and access
goals.

• Increasing the Nebraska Promise financial aid program which will

now cover full tuition costs for Nebraska students with family
incomes of $65,000 or less. This program, which covers tuition for
low- and middle-income students, creates opportunities for
 Nebraska’s young people and helps build a pipeline of talented
future workers for the state.

• A 3% merit salary pool for non-unionized faculty and staff for

2022-23. We know that providing competitive compensation is a
key strategy for recruiting and retaining talent.

• $48 million in permanent state-aided spending cuts across the

system, the result of increased expenses brought on by COVID-19,
inflationary pressures, and supply chain challenges. The FY 2022-23
reflects year three of the budget cut implementation, or
approximately $31 million.

• Key investment in strategic priorities such as faculty salary

competitiveness. The FY 2021-22 budget included $6 million to
enhance salaries at both UNL and UNMC to get faculty salaries
closer to their peer averages. The budget model for FY 2022-23
invests an additional $6 million in UNL and UNMC faculty salaries.

Expenditures, including compensation, are estimated and subject to the

availability of state funds appropriated to the Board of Regents.

SPONSORS: Chris J. Kabourek

Senior Vice President | CFO

RECOMMENDED: ___________________________________
Walter E. Carter, President
University of Nebraska

DATE: May 19, 2022

 University of Nebraska
2022-2023 Operating Budget
Proposal to the Board of Regents
June 23, 2022
 Operating Budget
The operating budget has two components. The first is the state-aided budget which includes the University’s
general operations supported by state tax appropriations and student tuition. The second component is
comprised of the University’s outside generated revenues - designated and restricted budgets which includes
the operations for self-supporting auxiliary entities of which many are restricted by bond covenants, restricted
federal research grants, restricted federal financial aid, and restricted private funds. No capital construction
budgets are included in this document.
 University of Nebraska (Excluding NCTA)
General Operating Budget
(Also Known As the 'State-aided' Budget)
FY 2022-23
(Operating Budget Supported Primarily by State Appropriations and Tuition Funds)

FY 2021-22 FY 2022-23
Proposed Change
Budget Budget Amount Percent
ESTIMATED FUNDING (a)
State Appropriations $ 628,412,933 $ 646,140,393 $ 17,727,460 2.8% (b)
Tuition (less University Remissions)
Resident 222,626,254 222,631,210 4,956 0.0% (c)
Nonresident & International 147,176,890 142,136,205 (5,040,685) -3.4% (c)
Tuition subtotals 369,803,144 364,767,415 (5,035,729) -1.4% (c)
Investment Income, other cash funds 19,338,700 19,521,491 182,791 0.9%
Total Revenues 1,017,554,777 1,030,429,299 12,874,522 1.3%

EXPENDITURES: (d)
Core Operations
Faculty Salaries 383,712,707 394,100,862 10,388,155 2.7% (e)
Nonfaculty Salaries 267,262,126 275,365,588 8,103,462 3.0% (e)
Benefits 82,246,805 84,928,090 2,681,285 3.3%
Health Insurance 81,994,748 86,914,434 4,919,686 6.0% (f)
Total Compensation 815,216,386 841,308,974 26,092,588 3.2%
Utilities 47,232,113 48,412,915 1,180,802 2.5%
All Other 143,260,939 146,842,463 3,581,524 2.5%
Budget Cuts (17,154,661) (48,524,053) (31,369,392) -3.1% (g)
Core Operations 988,554,777 988,040,299 (514,478) -0.1%
University Priorities: (h)
UNL & UNMC Faculty Competitiveness 6,000,000 12,000,000 6,000,000
Nebraska Promise 18,000,000 19,289,000 1,289,000 (i)
IT/Cybersecurity 1,000,000 2,000,000 1,000,000
Legislative Designations:
Career Scholarships 4,000,000 6,000,000 2,000,000
Behavior Health (UNMC BHECN) - 2,600,000 2,600,000
Rural Health Complex in Kearney - 500,000 500,000
Total Expenses 1,017,554,777 1,030,429,299 12,874,522 1.3%

NET ACTIVITY $ - $ - $ -

Notes:
(a) An estimated $120 million of one-time carry forward funds (encumbrances and other one-time commitments)
are not reflected above. Reinstatement of allotment (spending) authority for these funds will be submitted to
the State of Nebraska Department of Administrative Services (DAS). Capital construction budgets are not shown.
(b) Includes a 2.0% increase for core operations and legislative designations for career scholarships, Behavior Health
` (UNMC BHECN) and operating funds for the Rural Health Complex in Kearney
(c) The tuition budget includes no tuition rate increases. Resident enrollment conservative budgeted to be flat.
A rather significant decline in international students has been factored into the budget.
(d) Expenditure line items are estimated. Final budget figures may vary from figures noted above.
All expenses are subject to availability of state funds appropriated to the Board of Regents.
(e) A 4.5% merit salary pool was provided for all employees over three years. That includes a 0%
in 2020-21, 1.5% in 2021-22 and 3.0% in 2022-23. UNO and UNK faculty increases will be governed by collective
bargaining contracts which also includes a 4.5% increase over the three years.
(f) Assumes a 9% increase in premiums in calendar year 2023. Overall budget increase of 6% is based on a
fiscal year period, including six months (July-Aug 2022) of current premium increases at 3% and six months
(Jan-June 2021) at 5.7%.
(g) $48 million of spending cuts have been made over the past three years to allow for the tuition freeze and to
keep the budget structurally balanced
(h) University priorities reflects anticipated investments in strategic planning initiatives such as faculty compensation
competitiveness, Nebraska Promise, and IT/cybersecurity.
(i) Nebraska Promise increase reflects expanding eligibility for fall 2022 to those with Adjusted Gross Income (AGI)
of $65,000 or below.
 University of Nebraska (Excluding NCTA)
Total Budget - All Funds
FY 2022-23
FY 2022-23
FY 2021-22 Estimated Change
Budget Budget Amount Percent

General Fund Budget (state/tuition) $ 1,017,554,777 $ 1,030,429,299 $ 12,874,522 1.3%

Outside Revenues:
Designated Cash Funds 95,400,000 102,760,000 7,360,000 7.7% (a)
Revolving/Auxiliary Funds 702,000,000 807,240,000 105,240,000 15.0% (b)
Restricted Federal Funds 541,000,000 626,320,000 85,320,000 15.8% (c)
Restricted Trust Funds 479,000,000 504,290,000 25,290,000 5.3% (d)
Subtotals 1,817,400,000 2,040,610,000 223,210,000 12.3%

TOTALS $ 2,834,954,777 $ 3,071,039,299

(a) Primarily clinical revenues (i.e. Dentistry, Munroe-Meyer Institute, etc.) and F&A recovery on research grants
These funds are primarily designated to go back to the generating campus/department.

(b) Represents the budgets for the self-supporting units at the University (student housing, dining, Husker
Athletics, etc.). The 15% increase is not a spending increase, but a revenue increase driven primarily
by a reorganization that will be moving most of the NUCORP utility financial activities to the UNL campus.

(c) Represents an increase in federal grant activity and ARPA funds

(d) Represents an increase in privately funded activates (grants and contracts, Foundation support, etc.)
Tuition Rates